Brewdog Boosts Benefits

In the last few days of the crowd funding campaign, Brewdog has offered Boosted Benefits for levels of investment in the £5,000 - 50,000 range.

There is a hint of cult following marketing driven by big ego benefits. There is no substitute for a personal touch and Brewdog is right on the money with this one. Take the £10k level incentive - free beer for life in a growler with your name on it and a personalised equity punk card to prove you own the magic vessel that will keep flowing over every month until you stop walking into their bars asking for more. At this level there is also the 'name in lights' offer, or a steel plaque with your name on it, welded to a vessel in the brewhouse for as long as the stainless steel can weather the elements and withstand its useful operation time. It's shrewd, iconic and flashy, but it still doesn't report back to your bank account in the form of dividends. As long as you are happy to take your return on investment in beer, spirits, experiential benefits, a sense of belonging and being part of history you'll be alright.

I will admit that the experience based benefits are quite cool and are destined to develop long-term friendships and keep the super-class clients and supporter's tails wagging. I have no doubt that this Equity for Punks exercise will become an essential part of every future MBA course's case study curriculum.  I can't wait to hear how much they have managed to raise. Tomorrow is the deadline, so you literally only have hours left to splash out. 

Here's a post-dated update on the campaign. It turns out Brewdog raised £19 million - that's astounding. Congratulations!

Brewdog Millionaire

How do you raise funds for a business? I had a business lecturer who suggested you turn to 'family, friends and fools'.

Way back, crowd funding initiatives developed into the stock exchanges we know today. Now, however, with the Internet revolution the beer revolution is queuing at the online crowd funding 'make-it-up-as-you-go-along' grandstands. There are structured platforms like CrowdCube... or you can make up your own rules and punk your way into the black like Brewdog.  Brewdog are attempting to raise £25 million with their equity for punks scheme. You can read their prospectus here.

The FT has a good Q&A page on this deal and claims the current fundraising initiative values the company at £300 million and creates a price-to-earnings ratio (PE Ratio) of over one hundred times. That's very high in anyone's books!

The benefit of a stock exchange is that it creates trading liquidity - the ability to buy and or sell the share easily (if there is enough demand). Equity punks won't have this luxury - they will have to wait for an annual trading event and hope their specified minimum price reserve is not too high, or else the share won't sell.

Equity punks will not be able to share in any profits and will not receive any dividends. Besides the potential for the share to increase (or decrease) in value, the other advantage for owning equity will be to qualify for product-related perks in the form of discounts or free product deliveries from time to time, and the right to attend a shareholder meeting. However, don't expect to have much of a say in the company's decision making process, there is no intention to dilute the shareholding away from the core owners. The offer ends soon (April this year) so don't delay.

You may find that becoming an Equity Punk is making more of a feel-good investment than a prudent financial investment.  If you do become an Equity Punk, you will be able to howl out loud: 'I invested in a brewery, and own part of Brewdog. Woof!'